Seeking solutions to lack of workforce housing

The 29th annual Sussex County Today and Tomorrow Conference at Delaware Technical Community College focused on workforce housing, which is one of the most pressing issues in the county.

Bobbi Barends, vice president and campus director, said the issue hits close to home, as a survey found that 13% of the college's students are homeless, 46% are insecure in maintaining housing and 43% are on the low or very low scale when it comes to food security.

Barends said it was important to get a cross section of people at the conference. “We want to leave here with a blueprint we can work from,” she said.

“Government can be part of the solution, but we can't solve it,” said Sussex County Council President Mike Vincent during an introduction to the conference.

The morning session involved a panel representing the housing issues faced by the hospitality, healthcare, education and public safety industries, as well as issues involving development and construction, real estate and government. The afternoon sessions focused on promising practices and solutions, and development of a blueprint for action.

Need for affordable rentals

Sean O'Neill, University of Delaware policy scientist with the Delaware Chapter of the American Planning Association, said the demand for rental units has never been higher. “There is a need to build 500 rental units annually between now and 2035 to meet the demand,” he said.

He said home prices in the county are the highest in the state, with $427,500 as the median price. “The cost is out of reach for most of the county workforce,” O'Neill said. “And the resort areas drive up the prices.”

He said many workers are forced to find more affordable housing in western Sussex County and commute each day to the eastern side where many of the jobs are.

“What we need is cost-effective housing for low- to moderate-income families,” he said. “For young people starting out, affordability is a real challenge.”

Average rents in the county are $1,550 per month for one-bedroom apartments and up to $2,225 for four-member families, O'Neill said. With 30% of total income spent on housing being the accepted threshold, the cost puts apartments out of reach for low- and median-income residents.

He said developers tell him it's difficult to build multifamily housing in the county.

Building affordable rental units comes with challenges, including residents who oppose multifamily and/or workforce housing – not-in-my-backyard mentality – who have equity in their properties and want to protect their wealth, he said.

Identifying the issues

A panel of experts put the issues into perspective as they spoke to the large crowd.

Ashley Foster, Beebe Healthcare senior vice president and chief people officer, said Beebe employs 3,000 people. “And they are not all doctors and nurses. We are recruiting people for a multitude of jobs,” she said.

She echoed what others said, that most employees can't afford housing in the Lewes area. “If the commute time is more than 30 minutes, employees become retention risks as they find jobs closer to where they live,” she said.

Foster said the hospital's emergency team is on call and has no more than 30 minutes to get to the hospital. Lack of affordable housing makes it very difficult for people, and in-season traffic on Route 1 can cause delays, she said.

Mike Dickinson, president of SoDel Concepts, said the restaurant industry employs 25,000 people during the summer season. He said SoDel has 2,500 workers in the summer.

Dickinson said seasonal workers seem to find housing solutions that sometimes include three to four people in one room. “They tend to gut it out, but the year-round people are the foundation of our business,” he added.

He said the biggest challenge is finding housing for long-term employees. Dickinson said in the past it was possible to find rentals and condos for those workers as they planned future housing.

“That has passed, and affordable housing is not there at this point,” he said.

Transportation issues are also challenging. He said buses don't operate late hours or on Sundays.

Kevin Carson, Sussex Technical High School superintendent, said recruitment of staff is an ongoing issue. Many commute from Kent County and from nearby Maryland. “After about two years, we lose people who commute,” he said.

He said the school recruits teachers from Kent County and New Castle County, and those teachers who want to return to the county and retire here.

On the other side of the coin, Sussex schools are facing a large number of retirees over the next five years, including more than 400 teachers who will be eligible, he said.

“Right now, the education pipeline is empty. We'll continue to work with colleges like Delaware Tech to provide training,” he said.

Preston Schell, president of Ocean Atlantic Companies, said 98% of land in Sussex is zoned AR-1, which allows construction of two housing units per acre by right. “We have a large market for single-family homes from retirees moving from other states,” he said.

He said buyers are purchasing Schell homes averaging $850,000, compared to $500,000 five years ago.

“And they bring a lot of cash and are not using a lot of financing,” Schell said in regard to rising mortgage interest rates.

Schell said there is a logjam in construction permitting. “We have to look out three years,” he said.

Subdivision applications are reviewed by state agencies and county staff before public hearings are even scheduled, which can take 12 to 16 months, and the agency approval process can take a year or more, he said.

Schell said there is a high demand for housing, and builders can't keep pace.

“We can't respond quickly. There is not enough supply to make affordable housing. Affordability will continue to get worse as high-end buyers push people out. People will move farther west until this problem is addressed,” Schell said.

Schell said Ocean Atlantic has built 1,100 apartment units over the past five years. Two of the company's most recent projects are Seaglass near Rehoboth Beach and Weston Willows between Lewes and Georgetown.

Workforce solution in Lewes

Schell highlighted Dutchman's Harvest along Savannah Road, a first-of-its-kind project in Lewes that will provide workforce housing in an area identified by city officials as property for that housing type. He said 42 multifamily units have been sold to Milford Housing Development Corp., which will sell the units for $150,000 to $200,000. In addition, Schell said, the other 102 units will be sold at his cost plus 15%, or $100,000 to $200,000, which are both far under market rates.

He said the same model could be adopted throughout the county as long as the county and municipalities designate property for workforce housing, which streamlines the permitting process.

“If it works here, it will work in other areas if people have the courage to identify specific properties,” he said.

A blueprint for action

During a discussion on developing a blueprint for action, the following suggestions were presented by attendees and panel members:

• Create a workforce housing working group made up of county, state and community members to create a master plan, which all communities and the county can use to create a sustainable approach to workforce and affordable housing

• Put together a coalition of local representatives, developers, and local and financial experts to develop a plan

• Develop a list of stakeholders with the authority to push a plan forward, with input from grassroots agencies with their boots already on the ground

• Bring the largest employers together to get a buy-in for workforce housing and establish a workforce investment fund

• Designate special housing districts where workforce housing is most needed, including near employment centers

• Talk to Sussex County Council to begin a discussion on high-density rezoning

• Consider approval of high-density zoning along the Route 1 corridor between Lewes and Milford to allow for 20- to 30-story complexes

• A spectrum of housing options is needed, including shelters, transitional, short- and long-term rentals, and paths to home ownership with financial management to prevent foreclosures

• Hold town halls with a diverse audience

• Explore an additional tax on second homes to go to workforce housing

• Repurpose existing retail and industrial space to workforce housing

• Allow more higher-density and mixed-use housing

• More public transportation options

• Incentives or fast tracks for workforce housing developers and nonprofits at planning & zoning

• Develop a broad-based public education program on the issues using social, radio and print media

• Write letters to the editor about the need for workforce housing

• Think outside the box when it comes to zoning.

Finding solutions

Barends said solutions have developed thanks to discussions during previous conferences. The Sussex Economic Development Action Committee was formed following the 2007 conference.

In 2021, Dr. David Tam, Beebe Healthcare CEO and president, discussed the need for a medical school in Sussex County. Barends said SEDAC is actively seeking a consultant for a proposed project. And last year, an affordable housing working group was formed following the conference.